Local, state and federal governments routinely fund and/or administer a wide variety of financial assistance programs. Such programs include, among others, food stamps, aid to dependent children, unemployment insurance, WIC and the like. While programs such as these provide financial assistance to those in need, the implementation thereof can have adverse effects on the recipients of the benefits distributed thereunder. Many people still view receiving government assistance as a stigma and are often embarrassed when others become aware of that fact, for example, when purchasing groceries using food stamps. While the ongoing transition from the use of paper coupons to electronic benefit transfer (EBT) cards has enabled food stamp recipients to make purchases much more discretely, the electronic readers and/or point of sale (POS) systems employed in such transactions process EBT cards differently than debit and credit cards. For example, when purchasing groceries using an EBT card, the person using the card is required to identify the purchase as an EBT transaction. As a result, those nearby learn that the person is on food stamps, again producing an embarrassing moment for those sensitive to the fact that they are on public assistance.
In addition, public assistance programs are often plagued by high administrative costs. Moreover, such administrative costs often spill over into the private sector. For example, it is generally acknowledged that participation in the food stamp program causes merchants to incur additional administration costs. As a result, merchants accepting food stamps typically receive financial compensation from the governmental entity administering the food stamp program, thereby reducing the financial resources available to assist those in need. Even with financial assistance, however, many merchants are unwilling to accept the administrative burden accompanying participation in the program. This can result in the use of food stamps becoming unduly burdensome. For example, if the grocery stores closest to a food stamp recipient decline to participate in the program, the recipient can be forced to travel a considerable distance in order to purchase goods using the food stamps. This is particularly troublesome in that those receiving food stamps are most likely those who lack access to private transportation in order to travel to the merchant who does accept food stamps.
Further, food stamp programs adhere to a very traditional model of retailing in which all or nearly all of the foodstuffs which may be purchased using the benefits provided under the program are only available at the local grocery store. However, goods suitable for purchase using food stamps are available in a wide variety of retail stores. For example, a store specializing in athletic equipment may elect to sell a limited number of food items identified as appealing to people who exercise regularly. Convenience stores, on the other hand, sell a wide variety of goods, including staples such as milk and bread, suitable for purchase with food stamps. Thus, there are many retail outlets to which participation in the food stamp program may be extended but that do not currently participate due to the high administrative costs associated with, and/or an expectation of a relatively low volume of sales under, the program.
Finally, the proliferation of financial assistance programs has resulted in additional inefficiencies which consume a portion of the funds intended to be spent to assist those in need. For example, many of those in financial need are qualified to receive aid from multiple sources. For example, a food stamp recipient may also qualify for state unemployment insurance, aid to dependent children and/or WIC. If so, each agency providing financial assistance to a particular individual employs a separate process to distribute funds to that individual. Clearly, if a single process may be used to distribute financial assistance from multiple agencies to an individual, the cost of distributing benefits to that individual could be reduced, thereby decreasing the total cost of administering the various aid programs.
Commercial payment processing networks are employed in a growing number of commercial and/or financial transactions. In such transactions, the role of the commercial payment processing network is to ensure that a party which provides goods and/or services to another is reimbursed for those goods and/or services. Briefly, the commercial payment processing network electronically couples the issuer of a debit or credit card with the merchant or, more specifically, an acquirer who maintains funds on behalf of the merchant. When a party seeks to pay for a transaction using a credit or debit card, the commercial payment processing network notifies the issuer of the card to transfer the requested amount of funds to the acquirer. It is contemplated that it would be advantageous to employ a commercial payment processing network in a system and method for distributing benefits provided under financial assistance programs. Accordingly, disclosed herein is such a system and method.